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Trading Bases: A Story about Wall Street, Gambling, and Baseball (Not Necessarily in That Order)by Joe Peta
Synopses & Reviews
An ex–Wall Street trader improved on Moneyball’s famed sabermetrics to place bets that would beat the Vegas odds on Major League Baseball games—with a 41 percent return in his first year. Trading Bases explains how he did it.
After the fall of Lehman Brothers, Joe Peta was out of a job. He found a new one but lost that, too, when an ambulance mowed him down. In search of a way to cheer himself up while he recuperated in a wheelchair, Peta started watching baseball again, as he had growing up. That’s when inspiration hit: Why not apply his outstanding risk-analysis skills to improve on sabermetrics, the method made famous by Moneyball—and beat the only market in town, the Vegas betting line? Why not treat MLB like the S&P 500?
In Trading Bases, Peta shows how to subtract luck—in particular “cluster luck,” as he puts it—from a team’s statistics to best predict how it will perform in the next game and over the whole season. His baseball “hedge fund” returned an astounding 41 percent in 2011—and has never been down more than 5 percent. Peta takes readers to the ballpark in San Francisco, trading floors and baseball bars in New York, and sports books in Vegas, all while tracing the progress of his wagers. Often humorous, occasionally touching, and with a wink toward the sheer implausibility of the whole project, Trading Bases is all about the love of critical reasoning, trading cultures, risk management, and baseball. And not necessarily in that order.
"A Wall Street honcho takes his analytic skills to the big leagues in this rollicking financial adventure. With time on his hands after losing his job and getting run over by an ambulance, Peta, a former Lehman Brothers stock trader, concocted a numerical model that he hoped would predict the outcomes of Major League baseball games better than Las Vegas oddsmakers did — and turned his betting on the 2011 season into a toy investment fund. His lark prompts a fascinating tour of the science of 'sabrmetrics,' which translates individual players' stats — home runs, strike outs, and more exotic performance measures — into win-loss forecasts and playoff picks. (The deftly explained math only enhances the ball-park drama, especially when the Minnesota Twins go on an unexpected winning streak that threatens to sink the fund's returns.) The author applies his baseball-gleaned insights on the all-important difference between luck and skill to Wall Street's betting parlors, probing Lehman Brothers' disastrous risk-management failures and wondering why traders aren't evaluated as shrewdly as pitchers are. Peta's hardheaded but warmhearted narrative reads like a mashup of Liar's Poker and Moneyball peppered with besotted evocations of emerald green outfields and sports-bar camaraderie. His is that rare finance saga that's both smart and loads of fun." Publishers Weekly Copyright PWxyz, LLC. All rights reserved.
An exWall Street trader improved on Moneyballs famed sabermetrics and beat the Vegas odds with his own betting methods. Here is the story of how Joe Peta turned fantasy baseball into a dream come true.
Joe Peta turned his back on his Wall Street trading career to pursue an ingenious—and incredibly risky—dream. He would apply his risk-analysis skills to Major League Baseball, and treat the sport like the S&P 500.
In Trading Bases, Peta takes us on his journey from the ballpark in San Francisco to the trading floors and baseball bars of New York and the sportsbooks of Las Vegas, telling the story of how he created a baseball hedge fund” with an astounding 41 percent return in his first year. And he explains the unique methods he developed.
Along the way, Peta provides insight into the Wall Street crisis he managed to escape: the fragility of the midnineties investment model; the disgraced former CEO of Lehman Brothers, who recruited Peta; and the high-adrenaline atmosphere where million-dollar sports-betting pools were common.
About the Author
JOE PETA was a Wall Street market maker and hedge fund stock trader for fifteen years. A sports bettor for even longer and a lifelong baseball fan, he lives in San Francisco.
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